Monday, February 10, 2014

The Problem with Grandpa [UPDATED]

Well, Grandfathered policies. These are the plans that ostensibly fulfilled the empty promise that "if you like your current insurance, you can keep your current insurance" As we now know, this applied only to folks who made no substantive changes to their existing health insurance plans.

I'm fortunate to have a handful of clients who did not, in fact, make any such changes and whose plans are "grandfathered in."

Unfortunately, they won't be for long. Last week, one of my grandfathered clients received his 2014 renewal, along with a 28% premium increase. And there's nothing he can do about it because if he chooses to, for example, increase the deductible in order to rein in the premium, he loses grandfathered status.

So his only real choice is to pull the trigger on a new, ACA-compliant plan. In his case, this could actually save him substantial dollars versus his renewal. And because he's fortunate enough not to qualify for a subsidy, he can avoid the misbegotten Exchange. Of course he'll have higher out-of-pocket costs, and the knowledge that he could not, in fact, keep his current plan.

And he has to make his decision in the next few days if he wants a March 1st effective date.

Nice little policy you have there; be a shame if something were to happen to it....

UPDATE: In the comments, Nate points out - quite correctly - that a viable alternative to the challenge of grandfathered plans is to self-fund. Not sure how that works? Never fear, Nate has the answer here.